Asia’s Take on Austerity
NEW HAVEN – The austerity debate was the topic du jour at this year’s World Economic Forum in Davos. With good reason. Europe is slipping back into recession just when recovery in the United States is finally getting some traction. That has undermined the case for fiscal consolidation, which is so heavily favored in Europe.
Yet I took away a different conclusion from Davos. I moderated a session on “The New Context in East Asia,” addressed by a panel of senior representatives from Thailand, South Korea, Malaysia, Singapore, and Japan. With the exception of the Japanese participant, all had first-hand experience with the devastating Asian financial crisis of the late 1990’s.
I couldn't resist the temptation to draw Asia into the debate between Europe and the US. Rather than ask the Asian panelists to theorize about the impact of austerity in the overly indebted developed West, I asked them to assess their own experiences during and after the crisis of the late 1990’s.